Income Tax (Inkomstenbelasting)
Freelancers in the Netherlands pay income tax on their business profits. Below is an overview of the 2024 tax rates and applicable allowances:
Tax Rates for 2024
- 36.97% on income up to €75,624
- 49.50% on income over €75,624
Key Allowances to Consider
- Self-Employed Allowance (Zelfstandigenaftrek)
- €3,750 per year.
- Available if the freelancer works more than 1,225 hours annually and spends at least 50% of their time on their own business.
- Starters Allowance (Startersaftrek)
- €2,123 per year.
- Additional allowance for new freelancers, available only for the first three years.
- Small and Medium Business Deduction (MKB-vrijstelling)
- 13.31% of the taxable income, applied after deducting the "Zelfstandigenaftrek" and "Startersaftrek."
- Investment Allowances
- For investments exceeding €2,800 (individual investments must be above €450):
- 28% on investments between €2,800 and €69,765.
- €19,535 for investments between €69,766 and €129,194.
- €19,535 minus 7.56% on the portion exceeding €129,194.
- 0% on investments above €387,580.
These allowances can significantly reduce your taxable income, so it’s important to carefully track your business activities and investments throughout the year.
Value Added Tax (VAT or BTW)
Most freelancers must charge VAT on their services and remit it to the tax authorities. The standard VAT rate is 21%, with reduced rates of 9% and 0% applicable to specific goods and services.
Healthcare Insurance Contribution (Zorgverzekeringswet or ZVW)
In addition to income tax, you'll pay a healthcare insurance contribution of 5.32% on your income, up to a maximum income of €71,628.
It's important to note that tax rates and regulations can change annually. Therefore, it's advisable to consult the Belastingdienst or a tax professional for the most current information and personalized advice.